Afternoon Market Highlights
10/30/2019 4:07:08 PM
The mid-November Summit meeting got canceled because of riots that have been taking place in Chile over the past several weeks. The ongoing battle between the US/Chinese continues with ideas that once agreed on “Phase I” trade issues have started to show up on the table for discussion once again.
- The Federal reserve cut interest rates by 25 basis points.
- The EPA plans to finalize the biofuels proposal by the end of November 2019, which is slated to be the deadline for setting the blending requirements for 2020. The issue with the current proposal is the increased blending requirement for next year by some refineries, in an effort to offset the amount of exemptions that are expected to be rewarded to smaller refineries.
- Energy markets are mostly weaker with crude oil down 65 cents at $54.90/barrel.
- US$ down 170 at 97.50 but remains at a fairly high level, the gold market is up 7-8 bucks at $1,497/ounce and the CD$ is down 0.00465 at 0.75985.
Corn prices poked higher on weather worries, despite lack of export demand. Forecasts call for a bout of snow across parts of the US Corn Belt this week, which will hamper harvest activity and possibly cause damage to this year’s seasonably late planted corn. We are hearing a wide range of test weights and moisture in the corn crop (depending on variety and location of the corn).
- Closes: December $$3.90 ¾, up 4 ½ cents, July at $4.10 ½, up 1 ¾ cents, September at $4.03, up ½ cent and red December at $4.06 ¾, up ½ cent.
- Weekly ethanol production was reported at 1,004,000 barrels per day, up 8k barrels per day. Stocks were reported at 21.1 million barrels, down 300k barrels and the lowest level in over a year.
- Average trade estimates for tomorrow’s export sales report: 300-800 tmt.
- Temperatures across the US Midwest are expected to be quite chilly over the weekend, which could stop the growing season for the later planted corn.
- Spreads: moving in with the Z/H at an 8 ½-cent carry, Z/N 19 ½ carry, Z/Z 15 ¾ carry, H/K 5 ¾ carry.
Soybean prices weakened on uncertainty about the partial trade deal between the US and China. Harvest activity has picked up across North Dakota, with reports that the beans look pretty decent an, while some are still wet, the overall moisture of the beans are coming down toward more acceptable levels. Frigid temperatures are expected to move across the US this weekend, which should allow for harvest activity to continue.
- Closes: November at $9.16, down 2 ¼ cents, January at $9.30 ½, down 3 cents, July at $9.65 ¼, down 3 cents, red November at $9.68 ½, down 2 ½ cents. The product were softer also.
- USDA announced the sale of 132k tonnes of beans to an unknown destination for the current marketing year.
- Average trade estimates for tomorrow’s weekly export sales report: 500 tmt-1.1 mmt for beans, 100-250 tmt for meal and 0-24 tmt for soyoil.
- Spreads: X/F 14 ¼ carry, F/K 24 ½ carry, X/H 26 ½ carry, X/N 48 ½ carry.
Plentiful supplies, and lack of US demand pressured the wheat market. Prices saw additional pressure from lack of fresh supportive news. Japan was not in the market for their routine food tender this week. The USMCA trade agreement is still a work in progress, with chatter that it is ready to be signed but it is not getting in the right spot to get signed. Domestic mills seem to have adequate supplies for the nearby but are picking away at J/F/M timeframes.
- December closes: Mpls at $5.23 ½, down 2 ¼ cents, KC at $4.18 ¾, down ¼ cent, Chicago at $5.09 ¼, down 2 ¼ cents.
- The Mpls December closed a couple cents below its 50-Day MA of $5.25 ¼. The Kansas City Dec closed ¾-cent above its 20-Day MA of $4.18.The Chicago Dec closed ¼-cent below its 20-Day MA of $5.09 ½.
- The focus continues to be on the row crop harvest, with the last of the wheat in the fields looking to be of very poor quality.
- Argentina plans to export up to 800k tonnes of wheat to Vietnam, replacing Russian shipments that were suspended from the detection of thistle seed.
- Russia has been have been in negotiations with Vietnam in hopes of being their main supplier of wheat. Negotiations are expected to go on for an extended period of time.
- Average trade estimates for tomorrow’s weekly export sales report: 200-500 tmt.
- Spreads: Mpls Z/H 15 ½ carry, Z/Z 51 ¼ carry, Kansas City Z/H 12 ¼ carry, Z/Z 52 ¾ carry.
- Kansa city continues to gain on Mpls with the MWZ9 at a $1.05 ¼ premium over KWZ9.